No Harmony for Shippers

April 2006

You arranged shipment of your dangerous goods and declared it to the carriers as required by the International Maritime Dangerous Goods (IMDG) code. A fire originating from your consignment engulfs an entire ship and its cargo – in what circumstances could you be found liable?

In a recent case regarding strict liability, PPG Industries Inc, a manufacturer and shipper of cal-hypo, was found liable for the loss of a 1,799-teu vessel, the DG Harmony and her cargo, after a fire broke out as a result of the water-purifying commodity being stored inadequately.

The judge remarked: "Although I have concluded that PPG was not actually aware of the full risks of shipping cal-hypo in 300-pound drums in the manner in which it was shipped here, I conclude also that the hazard was reasonable, as there were sufficient red flags to have caused PPG, in the interests of reasonable care, to have investigated further the dangers presented."

Ruling
The court ruled PPG was strictly liable to the vessel and other cargo interests under the US Carriage of Goods Act, even though the claimants were not party to the bill of lading contract. PPG was negligent for not conducting appropriate safety tests on the method of storage they chose, and failed to warn the carrier of the known risks of cal-hypo, an unstable commodity with a history of costly accidents.

Implications
Information set out in the IMDG code for the shipment of dangerous goods is a guideline only. Full information and warnings relating to the risks of cargo, both actual and possible, should be supplied to the carrier by the shipper, and further investigations conducted if in any doubt.

The carrier must be in a position to make the decision to carry dangerous cargo on the basis of "informed consent" and shippers should be aware that this ruling will have an impact on them if they do not pass on full and thorough information to the carrier.